SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-14019
Ridgewood Hotels, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-1656330
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia
30339
- -------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(770) 434-3670
----------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Common stock, par value $.01 per share - 1,513,480 shares
outstanding at February 28, 1999.
<TABLE>
PART I. FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
-----------------------------
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
FEBRUARY 28, 1999 AND AUGUST 31, 1998
-------------------------------------
($000'S omitted, except per share data)
---------------------------------------
<CAPTION>
(Unaudited)
Feb. 28, August 31,
ASSETS 1999 1998
------ ----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 494 $ 1,255
Other 600 722
------------ ------------
Total current assets 1,094 1,977
REAL ESTATE INVESTMENTS, NET 4,486 4,423
OTHER ASSETS 791 880
------------ ------------
$ 6,371 $ 7,280
============ ============
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
<TABLE>
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
FEBRUARY 28, 1999 AND AUGUST 31, 1998
-------------------------------------
($000's omitted, except per share data)
---------------------------------------
<CAPTION>
(Unaudited)
Feb. 28, August 31,
LIABILITIES AND SHAREHOLDERS' INVESTMENT 1999 1998
---------------------------------------- ------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 250 $ 260
Accrued salaries, bonuses and
other compensation 78 107
Accrued interest and other liabilities 357 405
Current maturities of long-term obligations 53 65
------------ ------------
Total current liabilities 738 837
LONG-TERM OBLIGATIONS 2,660 2,679
ACCRUED PENSION EXPENSE 857 820
------------ ------------
Total liabilities 4,255 4,336
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' INVESTMENT:
Series A convertible cumulative preferred stock,
$1 par value, 1,000,000 shares authorized, 450,000
shares issued and outstanding at February 28, 1999
and August 31, 1998, liquidation preference
and callable at $3,600,000. 450 450
Common Stock, $.01 par value, 5,000,000
shares authorized, 1,513,480 shares
issued and outstanding at February 28,
1999 and August 31, 1998 15 15
Note receivable from officer for
purchase of common stock (75) (75)
Paid-in surplus 15,681 15,861
Accumulated deficit since December 30, 1985 (13,955) (13,307)
------------ ------------
Total shareholders' investment 2,116 2,944
------------ ------------
$ 6,371 $ 7,280
============ ============
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
<TABLE>
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
($000's omitted, except per share data)
---------------------------------------
Unaudited
---------
<CAPTION>
For the Three Months Ended For the Six Months Ended
--------------------------- ------------------------
Feb. 28, Feb. 28 Feb. 28, Feb. 28,
1999 1998 1999 1998
------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Revenues from wholly-owned hotel operations ....... $ 727 $ 866 $ 1,336 $ 1,567
Revenues from hotel management .................... 229 222 535 476
Sales of real estate properties ................... -- 850 10 1,575
Equity in net income of unconsolidated
entities ........................................ 34 -- 81 --
Interest income ................................... 2 7 10 20
Other ............................................. -- 57 -- 60
------------- ------------- ---------- ----------
992 2,002 1,972 3,698
------------- ------------- ---------- ----------
COSTS AND EXPENSES:
Expenses of wholly-owned real estate properties ... 620 615 1,191 1,193
Costs of real estate sold ......................... -- 580 5 854
Depreciation and amortization ..................... 93 48 187 95
Interest expense .................................. 85 84 170 168
General, administration and other ................. 524 547 990 1,050
Business development .............................. 41 114 77 154
------------- ------------- ---------- ----------
1,363 1,988 2,620 3,514
------------- ------------- ---------- ----------
NET INCOME (LOSS) ..................................... $ (371) $ 14 $ (648) $ 184
============= ============= ========== ==========
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE .... $ (0.30) $ (0.05) $ (0.55) $ --
============= ============= ========== ==========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
<TABLE>
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES
---------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
($000's Omitted)
----------------
Unaudited
---------
<CAPTION> For the Six Months Ended
------------------------
Feb. 28, Feb. 28,
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ............................................. $ (648) $ 184
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation and amortization ............................. 187 95
Gain from sales of real estate property ................... (5) (721)
Decrease (increase) in other assets ....................... 89 (22)
Decrease in accounts payable and
accrued liabilities ..................................... (141) (123)
------------- ------------
Total adjustments ......................................... 130 (771)
------------- ------------
Net cash used by operating activities ..................... (518) (587)
Cash flows from investing activities:
Proceeds from sales of real estate .......................... 9 1,450
Additions to real estate properties ......................... (41) (76)
Investment in unconsolidated entities ....................... -- (316)
------------- ------------
Net cash provided by (used in) investing activities ....... (32) 1,058
Cash flows from financing activities:
Repayments of notes payable ................................. (31) (29)
Payment of dividends on preferred stock ..................... (180) (180)
------------- ------------
Net cash used in financing activities ..................... (211) (209)
------------- ------------
Net decrease in cash and cash equivalents ....................... $ (761) $ 262
Cash and cash equivalents at beginning of period ................ 1,255 1,596
------------- ------------
Cash and cash equivalents at end of period ...................... $ 494 $ 1,858
============= ============
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 1999 AND FEBRUARY 28, 1998
(Unaudited)
1. GENERAL:
Ridgewood Hotels, Inc. (the "Company") is primarily
engaged in the business of acquiring, developing, operating and
managing hotel properties in the Southeast and "Sunbelt" areas.
Additionally, the Company owns several land parcels which are held
for sale. The Company was incorporated under the laws of the State
of Delaware on October 29, 1985. In January 1997, the Company
changed its name from Ridgewood Properties, Inc. to Ridgewood Hotels,
Inc. Prior to December 31, 1985, the Company operated under the name
CMEI, Inc.
The Company's common stock is listed in the National
Association of Securities Dealers (NASDAQ) over-the-counter bulletin
board service. Of the Company's issued and outstanding shares of
common stock, 51% of the common stock is owned by the Company's
President, N. Russell Walden. All of the Company's issued and
outstanding shares of preferred stock are owned by Alarmguard
Holdings, Inc.
The accompanying financial statements of the Company
present the historical cost basis amount of assets, liabilities and
shareholders' investment of the real estate business for the periods
presented. The consolidated financial statements include the
accounts of the Company, its wholly-owned subsidiaries and its
investments in unconsolidated entities after the elimination of all
intercompany amounts.
2. BASIS OF PRESENTATION:
The accompanying consolidated financial statements have
been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. In the
opinion of management, the consolidated financial statements reflect
all adjustments, consisting of normal recurring adjustments, which
are necessary to present fairly the financial position, results of
operations and changes in cash flow for the interim periods covered
by this report. Although certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations,
management believes that the disclosures are adequate to make the
information presented not misleading. These financial statements
should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's annual report
for the fiscal year ended August 31, 1998. The results of operations
for the six months ended February 28, 1998 are not necessarily
indicative of the results to be expected for the fiscal year ending
August 31, 1999.
The Company has net operating loss carryforwards for both
book and tax purposes which may be used to offset future taxable
income.
For the purpose of the Statement of Cash Flows, cash
includes cash equivalents which are highly liquid investments with
maturity of three months or less.
The Company accounts for its investments in
unconsolidated entities under the equity method of accounting after
the elimination of all intercompany transactions.
Certain prior year amounts have been reclassified
to conform with the current presentation.
3. INCOME TAXES:
The Company's income tax provision for the three
months ended November 30, 1998 and November 30, 1997 is as follows:
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
------------- ------------
Feb. 28, Feb. 28, Feb. 28, Feb. 28,
1999 1998 1999 1998
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Income tax provision -- $ 6,600 -- $73,000
Utilization of net operating
loss carryforwards -- (6,600) -- (73,000)
-------- -------- -------- ---------
Net income tax provision -- -- -- --
======== ======== ======== =========
</TABLE>
4. SHAREHOLDERS' INVESTMENT:
Loss Per Share --
The following table sets forth the computation of basic
and diluted loss per share:
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
-------------------------- ----------------------
Feb. 28, Feb. 28, Feb. 28, Feb. 28,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income (loss) $ (371,000) $ 14,000 $ (648,000) $ 184,000
Less preferred
dividends (90,000) (90,000) (180,000) (180,000)
---------- ---------- --------- --------
Net income (loss)
available to common
shareholders $ (461,000) $ (76,000) $ (828,000) $ 4,000
Weighted average
shares outstanding -
basic and diluted 1,513,000 1,538,000 1,513,000 1,538,000
========== ========== ========== =========
Net income (loss)
per share - basic
and diluted $ (0.30) $ (0.05) $ (0.55) $ --
========== ========== =========== =========
</TABLE>
The effect of the Company's stock options and convertible securities
was excluded from the computations for February 28, 1999 and 1998 as
it is antidilutive. Accordingly, for the periods presented, diluted
net loss per share is the same as basic net loss per share.
The $75,000 promissory note due from the Chief Financial
Officer was paid in full on April 2, 1999.
5. INVESTMENT IN UNCONSOLIDATED ENTITIES
On November 24, 1998, RW Hotel Partners, L.P., a limited
partnership of which the Company is the sole general partner, sold
one of its remaining two hotels. The only remaining hotel in the
partnership is in Thomasville, Georgia. The Company did not receive
any cash upon the sale of the hotel and, based upon management's
estimate, the Company will not receive cash upon the sale of the
remaining hotel. As of February 28, 1999, the carrying value of the
Company's investment in the partnership is -0-.
The Company is currently receiving the 13% preferred
return, management and incentive fees, and also anticipates receiving
20% of distributable cash from its two unconsolidated entities,
Houston Hotel, LLC and RW Louisville Hotel Associates, LLC.
The Company's investment in unconsolidated entities is
included in real estate investments on the balance sheet.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 1999
COMPARED TO THE THREE AND SIX MONTHS ENDED
FEBRUARY 28, 1998
LIQUIDITY AND CAPITAL RESOURCES --
In June 1995, the Company entered into a loan with a
commercial lender to refinance the Ramada Inn in Longwood, Florida.
The loan proceeds are $2,800,000. The loan is for a term of 20 years
with an amortization period of 25 years, at the rate of 10.35%.
Principal and interest payments are approximately $26,000 per month
beginning August 1, 1995. In addition, the Company is required to
make a repair escrow payment comprised of 4% of estimated revenues,
as well as real estate tax and insurance escrow payments. The total
amount for these items will be a payment of approximately $20,000 per
month and can be adjusted annually. The escrow funds will be used as
tax, insurance and repair needs arise. As of February 28, 1999,
there was approximately $157,000 of escrowed funds related to this
loan agreement.
On March 30, 1999, the Company sold a parcel of land in
Ohio for net proceeds of approximately $333,000.
On December 9, 1997, Houston Hotel, LLC ("Houston Hotel")
was organized as a limited liability company under the laws of
the State of Delaware. The purpose which Houston Hotel was organized
is limited solely to owning and managing the Hampton Inn Galleria in
Houston, Texas. The Company contributed approximately $316,000 into
Houston Hotel which represents a 10% interest, and the other 90%
interest is owned by Houston Hotel, Inc. (the "Managing Member"), a
Nevada Corporation.
Income or loss allocated to the Company and the Managing
Member is based upon the formula for distributing cash.
Distributable cash is defined as the cash from operations
and capital contributions determined by the Manager to be available
for distribution. Cash from operations is defined as the net cash
realized from the operations of Houston Hotel after payment of all
cash expenditures of Houston Hotel including, but not limited to,
operating expenses, fees, payments of principal and interest on
indebtedness, capital improvements and replacements, and such
reserves and retentions as the Manager reasonably determines to be
necessary.
Distributions of distributable cash shall be made as
follows:
- First, 100% to the Manager until it has been
distributed an amount equal to its accrued but unpaid 13% preferred
return.
- Second, 100% to the Company until the Company has been
distributed an amount equal to its accrued but unpaid 13% preferred
return.
- Third, 80% to the Manager and 20% to the Company.
A Property Management Agreement exists between Houston
Hotel, LLC and the Company as Property Manager ("Property Manager")
for the purpose of managing the hotel. The Property Manager shall be
entitled to the following property management fees:
1) 1.5% of the gross revenues from the hotel property.
2) 1.5% of the gross revenues from the hotel property as
an incentive fee if 85% of the budgeted net operating income is met.
RW Louisville Hotel Associates, LLC
On May 13, 1998, RW Louisville Hotel Associates LLC ("RW
Louisville Hotel Associates") was organized as a limited liability
company under the laws of the State of Delaware. The purpose which
RW Louisville Hotel Associates was organized is limited solely to
owning and managing the Holiday Inn ("the Hotel") in Louisville,
Kentucky. The Company's investment in RW Hotel Partners, L.P. of
$337,500 (see above) was transferred to RW Louisville Hotel
Associates at its historical basis. Simultaneously, the Company
invested $362,000 into Louisville Hotel, LLC. The combined equity of
$699,500 represents a 10% interest in the Hotel. Louisville Hotel,
LLC loaned $3,620,000 to the Hotel.
Income or loss allocated to the Company is based upon the
formula for distributing cash.
Distributable cash is defined as the net cash realized
from operations but after payment of management fees, principal and
interest, capital improvements and other such retentions as the
managing member determines to be necessary. Distributions of
distributable cash from Louisville Hotel, LLC shall be made as
follows:
- First, to the managing member until the managing member
has been distributed an amount equal to its accrued but unpaid 13%
preferred return.
- Second, to the Company until the Company has been
distributed an amount equal to its accrued but unpaid 13% preferred
return.
- Third, 20% to the Company and 80% to the managing
member.
Cash from a sale or refinancing would be distributed 10%
to the Company and 90% to the managing member.
A Management Agreement exists between the Owner and the
Company as Property Manager ("Property Manager") for the purpose of
managing the hotel. The Property Manager shall be entitled to the
following property management fees:
(1) Base Management Fee equal to 1.5% of gross revenues
from the hotel property.
(2) Incentive Management Fee equal to 1.5% of gross
revenues from the hotel in which the actual net operating income
exceeds 85% of the budgeted goal for the year.
(3) Super Incentive Management fee equal to: (a) .25%
of gross revenues from the hotel in which the net operating income
exceeds 106% of the budgeted goal for the year; (b) an additional
.25% of gross revenues in which the net operating income exceeds 112%
of the budgeted goal; and (c) an additional .50% of gross
revenues in which the net operating income exceeds 120% of the
budgeted goal.
The Company has a management agreement with the owner of
three hotels wherein it receives a management fee equal to 3% of
revenues plus 15% of the net operating income plus 5% of any profit
realized upon the sale of the hotels.
Since the Company is not currently generating sufficient
operating cash to cover overhead and debt service, the Company must
continue to sell its real estate assets, seek alternative financing
or otherwise recapitalize the Company. There is currently
approximately $500,000 of available cash. This available cash will
be used to fund operating losses until new sources of income can be
generated. The Company also intends to aggressively pursue the
acquisition of hotels and hotel management contracts through entities
similar to those described above which would provide additional cash
flow. As hotel properties are acquired, the Company plans to enter
into management agreements to manage those properties. However,
given increased competition in the hotel acquisition market,
acquisitions of economically viable properties are more difficult to
identify and purchase.
The Company owns one hotel, has 10% ownership interest in
two other hotels and has a 1% ownership interest in another. The
Company also currently has 13 other hotels which it manages but has
no ownership interest. Under the terms of franchise agreements, the
Company is required to comply with standards established by
franchisors, including property renovations and upgrades. The
success of the Company's operations continues to be dependent upon
such unpredictable factors as the general and local economic
conditions to which the real estate and hotel industry is
particularly sensitive: labor, environmental issues, weather
conditions, consumer spending or general business conditions and the
availability of satisfactory financing.
RESULTS OF OPERATIONS --
Operating revenues decreased approximately $139,000, or
16%, and $231,000, or 15%, for the three and six months ended
February 28, 1999, respectively, compared to the three and six months
ended February 28, 1998 due to decreased revenues at the Company's
hotel in Florida. Several new hotels opened near the hotel in
Longwood, temporarily creating a very competitive market.
Revenues from hotel management increased approximately
$7,000, or 3%, and $59,000, or 12%, for the three and six months
ended February 28, 1999, respectively, compared to the three and six
months ended February 28, 1998 due to overall increased revenues at
the hotels managed by the Company.
Equity in net income of unconsolidated entities was
$34,000 and $81,000, respectively, during the three and six months
ended February 28, 1999 compared to -0- during the three and six
months ended February 28, 1998. The Company invested in one entity
on December 31, 1997, but as of February 28, 1998, no equity had been
recognized.
The Company had gains from real estate sales of
approximately -0- and $5,000, respectively, for the three and six
months ended February 28, 1999. During the three and six months
ended February 28, 1998, the Company had gains from real estate sales
of approximately $270,000 and $721,000, respectively. Gains or
losses on sales are dependent upon the specific assets sold in a
particular period and the terms of each sale.
During the three and six months ended February 28, 1998,
the Company reocgnized other revenue of approximately $57,000 from
its investment in a small joint venture which develops residential
lots in Atlanta, Georgia.
Depreciation and amortization increased by $45,000, or
94%, and $92,000, or 97%, during the three and six months ended
February 28, 1999 compared to the three and six months ended February
28, 1998 due to the amortization of certain management agreements and
participation fees.
General, administration and other expenses decreased
approximately $23,000, or 4%, and $60,000, or 6%, for the three and
six months ended February 28, 1999 compared to the three and six
months ended February 28, 1998 as a result of overall slightly
decreased overhead.
Business development expenses decreased $73,000, or 64%,
and $77,000, or 50%, for the three and six months ended February 28,
1999, respectively, compared to the three and six months ended
February 28, 1998. The decrease was due to certain due diligence
costs incurred on several hotels considered for acquisition but never
purchased during fiscal year ended 1998.
YEAR 2000 --
The Company has established policies and procedures to
coordinate changes to computer systems and applications necessary to
achieve a Year 2000 date conversion with no effect on customers or
disruption to business operations. These actions are necessary to
ensure that the systems and applications will recognize and process
the Year 2000 and beyond. Major areas of potential business impact
have been identified and conversion efforts have been completed or
are underway. The Company's primary operating and financial systems
are already Year 2000 compliant. The Company also is communicating
with suppliers, vendors, financial institutions and others with which
it does business to coordinate Year 2000 conversion. The total cost
of compliance and its effect on the Company's future results of
operations is being determined as part of the conversion planning,
but is not expected to be material.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held
on January 26, 1999. At the annual meeting, three directors were
elected by the holders of the Company's common stock, par value $0.01
per share. The votes were as follows:
Director For Abstain
Michael M. Earley 909,631 4,480
Luther A. Henderson 912,511 1,600
N. Russell Walden 912,631 1,480
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits:
27 Financial Data Schedule
B. Reports on Form 8-K:
No exhibits or reports on Form 8-K were filed
during the three months ended February 28, 1999.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
RIDGEWOOD HOTELS, INC.
By: /s/ N. R. Walden______
N. Russell Walden
President
By: /s/ Karen S. Hughes___
Karen S. Hughes
Vice President,
Chief Accounting Officer
Date: April 13, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the
Consolidated Balance Sheets, Consolidated Statements of Operations and
Consolidated Statement of Cash Flow and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> FEB-28-1999
<CASH> 494,000
<SECURITIES> 0
<RECEIVABLES> 267,000
<ALLOWANCES> 3,447,000
<INVENTORY> 19,000
<CURRENT-ASSETS> 0
<PP&E> 3,139,000
<DEPRECIATION> 1,820,000
<TOTAL-ASSETS> 6,371,000
<CURRENT-LIABILITIES> 738,000
<BONDS> 0
0
450,000
<COMMON> 15,000
<OTHER-SE> 1,651,000
<TOTAL-LIABILITY-AND-EQUITY> 6,371,000
<SALES> 10,000
<TOTAL-REVENUES> 1,972,000
<CGS> 5,000
<TOTAL-COSTS> 1,383,000
<OTHER-EXPENSES> 1,067,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170,000
<INCOME-PRETAX> (648,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (648,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (648,000)
<EPS-PRIMARY> (0.55)
<EPS-DILUTED> (0.55)
</TABLE>
